€80,000

€75,000

€70,000

€65,000

€60,000

€55,000

€50,000
Operating profit

€45,000

€40,000
Row 28
€35,000
Row 42
€30,000

€25,000

€20,000

€15,000

€10,000

€5,000

€-

€(5,000)
January Feb- March April May June July August Septem October Novem Decem
ruary ber ber ber
Row 28
Row 42
Units 1 2 3 4
Opening stock - - 100 -
Production 1,000 1,000 1,000 1,200
Selling 1,000 900 1,100 1,200
Closing stock - 100 - -

Selling price €100.00

Raw materials per unit 2
Raw materials price €10.00
Fixed costs €50,000
Denominator 1,000
Product Cost VC €20.00
Product Cost AC €70.00

Variable Costing January February March April

Sales Revenue €100,000 €90,000 €110,000 €120,000
Cost of Goods Sold
Opening stock €- €- €2,000 €-
Variable cost of products manufactured €20,000 €20,000 €20,000 €24,000
Cost of Goods available for sale: €20,000 €20,000 €22,000 €24,000
Closing Stock €- €2,000 €- €-
Variable cost of products sold: €20,000 €18,000 €22,000 €24,000
Contribution Margin: €80,000 €72,000 €88,000 €96,000

Fixed period costs €50,000 €50,000 €50,000 €50,000

Operating profit €30,000 €22,000 €38,000 €46,000

Absorption Costing January February March April

Sales Revenue €100,000 €90,000 €110,000 €120,000
Cost of Goods Sold
Opening stock €- €- €7,000 €-
Variable cost of products manufactured €20,000 €20,000 €20,000 €24,000
Fixed cost of products manufactured €50,000 €50,000 €50,000 €60,000
Cost of Goods available for sale: €70,000 €70,000 €77,000 €84,000
Closing Stock €- €7,000 €- €-
Total cost of products sold: €70,000 €63,000 €77,000 €84,000
Contribution Margin: €30,000 €27,000 €33,000 €36,000

Adjustment for manufacturing variances €- €- €- €(10,000)

Operating profit €30,000 €27,000 €33,000 €46,000

Explaining the difference: January February March April

Operating profit Absorption costing €30,000 €27,000 €33,000 €46,000
Operating profit variable costing €30,000 €22,000 €38,000 €46,000
Difference: €- €5,000 €(5,000) €-

Units produced €1,000 €1,000 €1,000 €1,200

Units sold €1,000 €900 €1,100 €1,200
Stock mutation: €- €100 €(100) €-
Budgeted fixed manufacturing costs €50 €50 €50 €50
Difference: €- €5,000 €(5,000) €-

Closing stock in units €- €100 €- €-

Openings stock in units €- €- €100 €-
Stock mutation in units: €- €100 €(100) €-
Budgeted fixed manufacturing costs €50 €50 €50 €50
Difference: €- €5,000 €(5,000) €-
 5 6 7 8 9 10 11 12
- 400 - - 200 - - -
1,200 1,200 800 800 800 1,000 1,000 1,000
800 1,600 800 600 1,000 1,000 1,000 1,000 12,000
400 - - 200 - - - - 1,000

May June July August September October November December

€80,000 €160,000 €80,000 €60,000 €100,000 €100,000 €100,000 €100,000

€- €8,000 €- €- €4,000 €- €- €-
€24,000 €24,000 €16,000 €16,000 €16,000 €20,000 €20,000 €20,000
€24,000 €32,000 €16,000 €16,000 €20,000 €20,000 €20,000 €20,000
€8,000 €- €- €4,000 €- €- €- €-
€16,000 €32,000 €16,000 €12,000 €20,000 €20,000 €20,000 €20,000
€64,000 €128,000 €64,000 €48,000 €80,000 €80,000 €80,000 €80,000

€50,000 €50,000 €50,000 €50,000 €50,000 €50,000 €50,000 €50,000

€14,000 €78,000 €14,000 €(2,000) €30,000 €30,000 €30,000 €30,000

May June July August September October November December

€80,000 €160,000 €80,000 €60,000 €100,000 €100,000 €100,000 €100,000

€- €28,000 €- €- €14,000 €- €- €-
€24,000 €24,000 €16,000 €16,000 €16,000 €20,000 €20,000 €20,000
€60,000 €60,000 €40,000 €40,000 €40,000 €50,000 €50,000 €50,000
€84,000 €112,000 €56,000 €56,000 €70,000 €70,000 €70,000 €70,000
€28,000 €- €- €14,000 €- €- €- €-
€56,000 €112,000 €56,000 €42,000 €70,000 €70,000 €70,000 €70,000
€24,000 €48,000 €24,000 €18,000 €30,000 €30,000 €30,000 €30,000

€(10,000) €(10,000) €10,000 €10,000 €10,000 €- €- €-

€34,000 €58,000 €14,000 €8,000 €20,000 €30,000 €30,000 €30,000

May June July August September October November December

€34,000 €58,000 €14,000 €8,000 €20,000 €30,000 €30,000 €30,000
€14,000 €78,000 €14,000 €(2,000) €30,000 €30,000 €30,000 €30,000
€20,000 €(20,000) €- €10,000 €(10,000) €- €- €-

€1,200 €1,200 €800 €800 €800 €1,000 €1,000 €1,000

€800 €1,600 €800 €600 €1,000 €1,000 €1,000 €1,000
€400 €(400) €- €200 €(200) €- €- €-
€50 €50 €50 €50 €50 €50 €50 €50
€20,000 €(20,000) €- €10,000 €(10,000) €- €- €-

€400 €- €- €200 €- €- €- €-
€- €400 €- €- €200 €- €- €-
 €400 €(400) €- €200 €(200) €- €- €-
€50 €50 €50 €50 €50 €50 €50 €50
€20,000 €(20,000) €- €10,000 €(10,000) €- €- €-